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Wind blows flags at the Armstrong Flooring plant, 1067 Dillerville Road in Lancaster city Thursday, April 7, 2022.

Wind blows flags at the Armstrong Flooring plant, 1067 Dillerville Road in Lancaster city Thursday, April 7, 2022.

Armstrong Flooring has notified its United States workers, including 606 in Lancaster County, that they may remain employed as long as two weeks after the company expects to either have a buyer or announce a shutdown on July 7.

The layoffs would come if the company is unable to complete a sale with a qualified bidder that would operate some or all of its facilities.

In May, the East Lampeter Township-based Armstrong Flooring had told workers that layoffs could come as early as June 17 and as late as July 1 as it sought to sell the company.

The company was scheduled to present the winning bid or bids in Delaware bankruptcy court on Wednesday but postponed a sale hearing until July 7, which is when its $24 million bankruptcy loan is supposed to be paid back. 

Armstrong Flooring said it would continue its auction of assets on Tuesday in hopes of getting “higher and better bids.” It already has a qualified bidder for its Chinese and Australian assets. 

The company’s communications team told LNP|LancasterOnline Thursday that it sent a “supplemental WARN Notice to employees on Wednesday indicating that conditional layoffs may occur between July 7-21 if the company is unable to execute a transaction with a qualified bidder that would operate some of all of the companies facilities as a going concern.”

The layoffs are not a certainty. A Worker Adjustment and Retraining Notification (WARN) notice filed with the state Department of Labor & Industry is required under federal law when a company anticipates a mass layoff is possible within 60 days. 

The company would likely need some workers for a wind down if it was not sold, it has indicated in court filings. Earlier this month the company asked the court to approve a bonus plan for 50 mid-level managers who were important to assist with the sale. A smaller subset would be needed for wind down, if the buyer was a liquidator and did not intend to operate the company.  

Asked if the company would have enough money to pay the workers, given that its loan is due July 7, Armstrong Flooring responded, “All employees will be paid for hours worked.”

Through its bankruptcy loan, Armstrong Flooring had sought leeway from the court and its lenders to focus on critical needs to keep the company going through bankruptcy. Its present finances aren’t clear. At the end of May the company reported it had about $5 million cash balance. Its monthly payroll and benefits was $1 million and it spent about $800,000 for payroll taxes. It lost $28 million in May, according to the report.

The company owes an estimated $318 million, including $160 million in long-term debt. It received court approval to sell off its assets it values at $517 million.

Armstrong operates seven manufacturing plants in three countries. Two plants are in  Pennsylvania, one in Lancaster city and one in Beech Creek Township, Clinton County. There are plants in Illinois, Mississippi, Oklahoma and one plant each in China and Australia. The plants in China and Australia are not part of the bankruptcy but are part of the sale.

The assets also include trademarks and intellectual property.

Armstrong Flooring said Wednesday that it had identified a lead bidder for its Australian and Chinese assets, both of which exceeded the starting bids following multiple rounds of bidding. 

There were at least three bids, according to court filings by creditors who are a party to the process. 

Approximately 289 manufacturing employees in Mississippi and Lancaster are represented by various unions including the United Steelworkers and International Association of Machinists and Aerospace Workers, the unions have said. Armstrong Flooring also hires full- and part-time independent contractors, and temporary employees.

According to Armstrong, there are 215 employees at its facilities on Dillerville Road and Loop Road in Lancaster, and 391 are assigned to or report to the Greenfield Corporate Office on Hempstead Road.

There are 35 employees at its Beech Creek facility who are not represented by a union. There are 81 workers in Mississippi and 128 in Oklahoma, according to WARN notices in those states. The company also has about 337 workers in Illinois, according to its WARN notice in that state.

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Armstrong Flooring, the company, is just six years old but it carried a 160-year-old legacy of Armstrong flooring that began with the Pittsburgh cork company and grew in a Lancaster corn field. 

Here are key dates in Armstrong Flooring Inc. history running from just before it became its…

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